Body
RegTech is composed of the words “regulatory” and “technology”. It is a collective term for the application of modern technologies, to get the increasing regulation in the banking- and financial sector under control both from an IT and a legal standpoint.
Introduction
Attitude of the country towards RegTech-services
In the United States, banks, broker-dealers, investment advisers, and other financial institutions widely use RegTech solutions to support compliance efforts. Although the RegTech providers themselves are not directly regulated, the financial institutions using these services remain responsible for ensuring compliance. As a result, these institutions often oversee RegTech providers or require them to implement robust compliance policies and procedures. Regulatory attitudes towards RegTech are generally neutral to cautious, as these technologies can complicate the regulatory process, making it more challenging for regulators to conduct effective examinations and inspections.
Legal affairs
Obligations and requirements to provide RegTech-services
There are no specific regulatory requirements that apply broadly to RegTech services. However, RegTech providers must ensure their solutions meet relevant regulatory requirements based on the type of compliance they support. This means that while there is no universal regulatory framework for RegTech, the solutions must align with the specific compliance obligations related to the financial regulations they address.
Additional comments regarding the legal situation for RegTech-services or what RegTech’s must be aware of in this business area
The liability of RegTech providers can vary by state, as the regulatory landscape is not uniform. Although RegTech services themselves are generally not directly regulated, certain activities they perform may require specific licenses or permissions in different states.
Economic conditions
Market size for RegTech-services and biggest companies in this business area
The RegTech market is still emerging, and reliable comprehensive market data is limited. Notably, RegTech companies often specialise in specific areas of regulatory compliance, such as broker-dealer oversight, identity verification, or banking regulations. Consequently, comparing RegTech firms can be challenging. Some leading companies in this space include ComplyAdvantage, Chainalysis, and Onfido. Many well-established firms such as IBM, Thomson Reuters, and Broadridge offer RegTech solutions, which often are bespoke for the consumer . This list is not exhaustive and represents just a sample of the broader range of RegTech providers currently operating in the market.
Additional comments regarding the economic situation for RegTech-services or what RegTech’s must be aware of in this business area